Mirae Asset Securities said on the 10th that Seoul Guarantee Insurance remains attractive because its high dividends are continuing and exceed the threshold for separate taxation of dividend income. It did not offer an investment opinion. The previous day's closing price of Seoul Guarantee Insurance was 50,000 won.
Mirae Asset Securities expected that, supported by gradual profit recovery and a stable capital ratio, Seoul Guarantee Insurance will continue the previously promised cash dividends of more than 200 billion won.
If Seoul Guarantee Insurance maintains the same cash dividends as the previous year, the current dividend yield is estimated at 5.7%. In addition, the dividend payout ratio of Seoul Guarantee Insurance exceeds the 40% threshold for separate taxation of dividend income, allowing separate taxation of dividend income even without increasing profit dividends.
Jeong Tae-jun, an analyst at Mirae Asset Securities, said, "It is also attractive that, in addition to high dividends, investors are expected to enjoy the benefit of separate taxation."
Net profit was also projected to improve. This is because there are signs that the loss ratios by major lines are improving.
Jeong said, "Seoul Guarantee Insurance's cumulative loss ratio for the third quarter is 73.5%, a lower level than last year's annual loss ratio of 75.2%," adding, "This is attributable to improvements in the loss ratios of performance bonds, which have the largest outstanding balance, and housing real estate guarantees."
It was analyzed that the economic recovery and rising real estate prices had a significant effect on improving the loss ratio. Jeong predicted, "If the economic recovery accumulates, the improving trend in the loss ratio is also expected to continue."
There is also an outlook for growth. Jeong explained, "In recent years, the growth rate of outstanding guarantees has slowed along with the economy," and "as the leading index continues to rise, the economy is expected to soon move beyond recovery to show a full-fledged improvement, so growth improvement is anticipated."
Seoul Guarantee Insurance maintained a 50% dividend payout ratio before listing. Mirae Asset Securities projected that if profit growth continues and profits merely recover to the 2023 level (416.4 billion won), the cash dividend amount could increase from the current level.